When making technology decisions, one of the hardest things to do is to quantify the value of your decision – so you can be sure you are making the right decision. Sure, you can compare features and consider subjectively the potential benefits they may offer your business, but it’s very challenging to define an objective measure that lets you translate the theoretical into your bottom line.
That’s why we often turn to calculators and models to help come up with that metric. Which is when you will discover a veritable alphabet soup of acronyms from ROI to TCO. We just commissioned Forrester Consulting to complete yet another acronym - a TEI, which stands for Total Economic Impact (full disclosure: I’m a former Forrester analyst and research director).
I loved a few things about this process: 1) it’s in the name - it looks at the total economic impact of a three year investment in a solution; 2) it’s conducted by an independent - and respected - research company; and 3) it can be adjusted for a whole host of variables: risk, flexibility, internal resources, partners, and so on.
I find most Total Cost of Ownership reviews fail on the “total” part. They examine the IT costs and offset them with IT-related savings (time, people, etc). But, they don’t tend to look at business user efficiencies or enhanced business effectiveness the way an ROI study does. But, then that’s where the ROI study ends.
The Total Economic Impact™ Of Selligent, a February 2017 commissioned study conducted by Forrester Consulting on behalf of Selligent, looks at costs and benefits very broadly. Forrester interviews clients of a solution and understands what benefits they derive and the financial impact of those benefits - for example, improved efficiencies, better customer retention, cost savings from consolidation. They dig in to understand how much a customer benefits from each benefit to get a “total” perspective. And, they do the same with costs. It’s not just the cost of the software and the professional services fees, they consider internal development and program costs, as well as any partner costs. And, then they adjust for risk and flexibility - again based on those interviews with customers.
And, then, recognizing that no two customers are alike, Forrester hosts an application that allows a prospect to customize the findings to their specific business - making it as relevant as possible for the user.
If you’d like to see an example of the TEI case study that Forrester conducted about Selligent, click here. And, you can see what a lite version of the customization looks like here. The full customization requires a conversation - we’d love to have that conversation!